With disaster in the eurozone once more postponed, if not vanquished, markets
are again turning to the US in their never-ending search for trouble.

There's plenty to worry about, from the immediate threat of default if the political system feels suicidal enough to refuse to lift the US debt ceiling, to the imminent conclusion of QE2.

No one really knows what effect turning off the liquidity tap will have on demand. In theory, it should lead to a slight tightening of monetary conditions, with the dollar appreciating a little and bond yields up a bit.

But the read-through is by no means certain. It's a bit like weaning someone off a drug addiction. The patient may respond positively, but it could go the other way. Certainly the UK economy has struggled to show much growth since the QE stopped.

On the debt ceiling, we have to assume that as with the Greek austerity vote, the brinkmanship on Capitol Hill is no more than an elaborate game of bluff and that the limit will eventually be lifted. Even so, Republicans and Democrats alike seem determined to take things to the wire. For markets, trading opportunities abound around the consequent uncertainty.

Neither side wants to be seen as the one that pulled the plug on the economy by causing the US to default; the consequences of such an action right at the very heart of the world monetary system are too awful to contemplate, though admittedly one or two hotheads seem to think the ensuing mass liquidation wouldn't be too bad. These outliers can be safely ignored; default would be catastrophic.

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Oddly enough, this gives both sides a powerful bargaining chip. Do what we say on tax and spend, they threaten, or you will be the one seen to have pulled the whole house down. The result is complete stalemate. Republicans won't agree tax rises, and Democrats won't agree spending cuts. Never the twain shall meet.

As if to make matters worse, President Barack Obama seems this week to have chucked the prospect of a third fiscal stimulus into the mix. His thinking is as much determined by the political cycle as the economic one. After a brief Osama bin Laden spike in his popularity ratings, the President has sunk right back. He knows he's toast if he's not making unambiguous inroads into unemployment by this time next year.

He should have been bolder at the outset, when he first became president and still had the political capital to do something substantive. It's too late now. The immediate crisis of that time has gone, and today all the pressures are the other way around, with markets and opposition alike baying for fiscal consolidation. Mr Obama is not going to be allowed to borrow and spend his way to a second term.

I'm not sure how seriously anyone takes the International Monetary Fund in the US these days, but there was a small lifeline thrown in the President's direction this week in the form of the IMF's annual health check of the US economy.

More needs to be done on fiscal consolidation, the IMF said, "as debt dynamics are unsustainable and losing fiscal credibility would be extremely damaging". Mmm. Maybe not so good for the White House after all. But here's the sop, no doubt squeezed from reluctant IMF officials by their largest shareholder with a shotgun held to their head. "Excessively large upfront fiscal adjustment could significantly weaken domestic demand," the IMF says. In other words, consolidate by all means, but do it later once the President is back in office.

Well, blow me down. Isn't that what President Obama and supporters in economic academia such as the lugubrious Larry Summers have been saying all along? And now the IMF agrees. Strangely, the IMF came to the exact opposite conclusion in its recent assessment of the UK economy, where the Coalition's front end-loaded fiscal consolidation was praised to the rafters as possibly the most impressive example of grabbing the bull by the horns in the Western world.

Of course, what's judged good for the UK could be inappropriate for the US, with its central position at the heart of the world economy as consumer of last resort. But that's not the way I see it. As ever, the IMF is the incumbent administration's poodle. It largely says what it is told to.

AS it happens, prospects for the world economy are not quite as grim as sometimes painted. In the West, the consumer remains flat on his back, and as the IMF observes in its US assessment, is likely to remain there for some time.

Things are terrible, the big retailers say, and everyone listens, for until a few years back their industry truly was a proxy for the economy as a whole. Yet that world has gone, at least for the time being. Both in the US and the UK, activity must become more reliant on investment and net trade.

In both economies, we are seeing the beginnings of this switch. Again in both economies, output has entered something of a soft patch, generating abject panic that the recovery is stalling. I'm not convinced. Take away the effects of high oil prices and the supply chain disruptions of the Japanese earthquake, and things don't look so bad. The US has acted decisively on oil prices, while the supply interruptions of recent months are now fast abating as Japanese manufacturing gets back to normal.

More encouragingly still, there is now less reason to worry about China and the rest of Asia. On his recent visit to the UK, Wen Jiabao, the Chinese premier, said he was confident China had got on top of the inflation problem.

If that's true, it's welcome news, for the slowdown in Asia is entirely self induced, and it would mean that in defiance of what many of us would have predicted, Chinese policymakers have succeeded in engineering a soft landing for what had become a seriously overheated economy. That in turn is a bonus for struggling advanced economies.

America's fiscal difficulties would be easily solved given the political will and leadership. As is the case in many advanced economies, the US spends too much and taxes too little.

Americans cannot have a European-style welfare state, a modern infrastructure, and a defence budget equating to 4.5pc of GDP unless they are prepared to pay for it. I know I'll offend our Republican friends by raising the matter, but the IMF's suggestion of a federal sales tax is not a bad one.

America could cure the deficit overnight with a sales tax set at even a fraction of European levels. But hell will freeze over before we see one.